Johnson & Johnson Reaches $33M Drug Settlement with 42 States, DC

MANHATTAN (CN) – Johnson & Johnson reached a $33 million settlement Wednesday to resolve claims over manufacturing issues that led to a massive recall of Tylenol and other drugs.

New York Attorney General Eric Schneiderman announced the deal with subsidiary McNeil PPC today in cooperation with 42 states and the District of Columbia.

He said a cross-country investigation conducted by the Food and Drug Administration and state attorneys general found that McNeil PPC produced and sold over-the-counter drugs between 2009 and 2011 that did not comply with federally mandated good manufacturing practices.

Several of the recalled drugs, which are deemed adulterated, are indicated for pediatric use.

Schneiderman blasted the pharmaceutical company’s handling of products, particularly when it comes to drugs directed to children. “This is common sense: over-the-counter drugs, especially those used to treat children, must be manufactured in accordance with federally mandated standards,” the attorney general said.

Schneiderman filed a complaint, charging McNeill with violations of state consumer-protection laws, simultaneously with the settlement in Manhattan Supreme Court.

“Drug companies that use deceptive practices threaten New Yorkers’ health and wellbeing – and we won’t hesitate to hold them accountable,” he said.

The 7-page complaint quotes McNeil as having reached a federal guilty plea with the United States about its adulterated drugs.

Along with disgorgement of all ill-gotten profits, the complaint demands restitution and damages for injured consumers.

The accompanying consent order mandates that McNeil’s websites cannot represent that their OTC drug-manufacturing facilities met the FDA’s “cGMP” standards if McNeil had Class I or Class II recalls of OTC drugs within the last 12months caused by noncompliance at its facilities in Fort Washington, Pennsylvania, or Las Piedras, Puerto Rico.

Johnson & Johnson is represented by Ethan Posner at Covington & Burling. “Those recalls were precautionary and not undertaken on the basis of any health or safety risks to consumers, and we remain committed to providing consumers with safe and effective over-the-counter medicines,” a spokesman for the manufacturing giant said in a statement.

Schneiderman’s complaint was filed by Assistant Attorney General Benjamin Lee from the Consumer Frauds and Protection Bureau in New York City. Assistant Attorney General-in-charge Jane M. Azia also served as counsel.